Campbell Company produces a product that has a variable cost of $28 per unit and a sales price of $55 per unit. The companys annual fixed costs total $760,000. It had net income of $320,000 in the previous year. In an effort to increase the companys market share, management is considering lowering the selling price to $48 per unit.

Required

1. If Campbell desires to maintain net income of $320,000, how many additional units must it sell to justify the price decline?

2. Assume that in addition to lowering its selling price to $48, Campbell also desires to increase its net income by $78,000. Determine the number of units the company must sell to earn the desired income.